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Empower Plans to Sell 10% Stake, List on Dubai Financial Market

Empower Plans to Sell 10% Stake, List on Dubai Financial Market
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Empower Plans to Sell 10% Stake, List on Dubai Financial Market

Empower Plans to Sell 10% Stake, List on Dubai Financial Market

Emirates Central Cooling Systems Corporation (Empower) announced plans to proceed with an initial public offering (IPO) and to list a portion of its ordinary shares for trading on the Dubai Financial Market (DFM).

In a press conference on Monday, Empower said that one billion (1,000,000,000) Shares, each with a nominal value of AED0.10 will be made available in the Offering, representing 10% of Empower's total existing share capital.

It said all shares to be offered represent the sale of existing shares held in aggregate by DEWA and Emirates Power (an indirectly wholly owned subsidiary of Dubai Holding) (together the "Selling Shareholders"), with DEWA selling 7% and Emirates Power selling 3% in the Offering, state news agency WAM reported.

The corporation affirmed that the Selling Shareholders reserve the right to amend the size of the Offering (in whole and/or individual tranches) at any time before the end of the subscription period of the Second Tranche, subject to applicable laws and approval by the Securities and Commodities Authority (SCA).

The subscription period will open on 31st October 2022 and is expected to close on 7th November 2022 for the UAE Retail Investors and on 8th November 2022 for Qualified Investors.

The Internal Sharia Supervision Committee of Emirates NBD Bank has issued a pronouncement confirming that, in its view, the Offering is compliant with Shariah principles.

Following the Offering, the Company intends to adopt a semi-annual dividend distribution policy and to pay dividends twice each fiscal year after the Offering in April and October of each year.

The Group expects to pay a minimum dividend amount of AED850 million per annum, in the first two fiscal years following the Offering (April 2023 to October 2024). The Company expects to distribute its first dividend payment of a minimum of AED425 million after the Offering, for the second half of 2022, by April 2023. After the October 2024 distribution, the Company expects to pay a sustainable dividend in line with the growth of the business.

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Expert: Türkiye Anti-inflation Steps Don’t Go Far Enough

People shop at a bazaar in Istanbul. Reuters
People shop at a bazaar in Istanbul. Reuters
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Expert: Türkiye Anti-inflation Steps Don’t Go Far Enough

People shop at a bazaar in Istanbul. Reuters
People shop at a bazaar in Istanbul. Reuters

Although Turkish inflation slowed in September, it is still raging out of control with the government avoiding difficult decisions that could help tackle it, experts told AFP.

Türkiye has experienced spiraling inflation the past two years, peaking at an annual rate of 85.5 percent in October 2022 and 75.45 percent in May.

The government claims it slowed to 49.4 percent in September.

But the figures are disputed by the ENAG group of independent economists who estimate that year-on-year inflation stood at 88.6 percent in September.

Finance Minister Mehmet Simsek has said Ankara was hoping to bring inflation down to 17.6 percent by the end of 2025 and to “single digits” by 2026.

And President Recep Tayyip Erdogan recently hailed Türkiye’s success in “starting the process of permanent disinflation.”

“The hard times are behind us,” he said.

But economists interviewed by AFP said the surge in consumer prices in Türkiye had become “chronic” and is being exacerbated by some government policies.

“The current drop is simply due to a base effect. The price rises over the course of a month is still high, at 2.97 percent across Türkiye and 3.9 percent in Istanbul.

“You can’t call this a success story,” said Mehmet Sisman, economics professor at Istanbul’s Marmara University.

Spurning conventional economic practice of raising interest rates to curb inflation, Erdogan has long defended a policy of lowering rates. That has sent the lira sliding, further fueling inflation.

But after his reelection in May 2023, he gave Türkiye’s Central Bank free rein to raise its main interest rate from 8.5 to 50 percent between June 2023 and March 2024.

The central bank’s rate remained unchanged in September for the sixth consecutive month.

“The fight against inflation revolves around the priorities of the financial sector. As a result, it is done indirectly and generates uncertainty,” explained Erinc Yeldan, economics professor at Kadir Has University in Istanbul.

But raising interest rates alone is not enough to steady inflation without addressing massive budget deficits, according to Yakup Kucukkale, an economics professor at Karadeniz Technical University.

He pointed to Türkiye’s record budget deficit of 129.6 billion lira (3.45 billion euros).

“Simsek says this is due to expenditure linked to the reconstruction in regions hit by the February 2023 earthquake,” he said of the disaster that killed more than 53,000 people.

“But the real black hole is due to the costly public-private partnership contracts,” he said, referring to infrastructure contracts which critics say are often awarded to firms close to Erdogan’s government.

Such contracts cover construction and management of everything from motorways and bridges to hospitals and airports, and are often accompanied by generous guarantees such as state compensation in the event they are underused.

“We should question these contracts, which are a burden on the budget because this compensation is indexed to the dollar or the euro,” said Kucukkale.

Anti-inflation measures also tend to impact low-income households at a time when the minimum wage hasn’t been raised since January, he said.

“But these people already have little purchasing power. To lower demand, such measures must target higher-income groups, but there is hardly anything affecting them,” he said.